More hospitals demand payment on the spot

North Jersey hospitals increasingly ask patients for cash deposits or credit-card imprints before they undergo surgery or high-priced tests.

They know it's easier to collect when the patient is in the waiting room, anxious to get a medical problem diagnosed or treated. Under intense financial pressure, hospital financial executives no longer wait months to bill the patient after insurance has paid.

Hospitals have wired scores of offices to swipe credit cards, assigned dozens of staff members to determine the patient's liability in advance, and added financial registrars to virtually every admission routine.

Often, patients are called days ahead and advised to bring a method of payment with them. Even in the emergency room, after the patient is stabilized, a family member is asked for the insurance information — and, generally, a $100 copay.

"When you go to Best Buy, do you walk out without paying?" said Anthony Orlando, the chief financial officer at Englewood Hospital and Medical Center. Hospitals should be no different, he said. "The only chance to collect a debt, direct and face to face, is when they're here. You may never see them again."

This is a change in culture for North Jersey's mostly non-profit hospitals — one driven by increasing competition and narrower operating margins. It's part of a national trend. Medicare and Medicaid, government programs that insure the majority of hospital patients, barely cover costs. Managed-care companies, which insure most of the rest, are notorious for their hard bargaining on payment rates. And the state reimburses pennies on the dollar for charity care.

Hospitals can't afford to leave money on the table, their executives say.

"No hospital could make it financially without collecting copayments," said Robert Glenning, Hackensack University Medical Center's chief financial officer. In addition, contracts with insurers and Medicare require hospitals to make the effort.

If patients owe copays or deductibles — and most do — the hospitals do their utmost to collect. Besides using their own billing staffs, they contract with outside vendors and sell long-overdue debts to collection agencies.

But first they ask at check-in for patients to pay their portion of the bill.

Time-of-service collection

Holy Name Medical Center switched to time-of-service collection two years ago. "It's a lot easier to collect those [copays] upfront," said Cynthia Kaufhold, the hospital's vice president for revenue cycle.

Patients sometimes give billing addresses that are undeliverable, she said. Their phones ring unanswered. Calls aren't returned. "It's very expensive to collect it after the fact," she said. "It's astounding how little we collect on the back end."

Even at St. Joseph's Healthcare System, where nearly 70 percent of the patients are covered by Medicare or Medicaid, the hospital "asks for more upfront than we used to," said Jack Robinson, the chief financial officer.

"Asking for it upfront is a lot better than asking for it a month afterwards," he said, because patients are more attentive and more apt to pay.

Federal law requires hospital emergency rooms to treat patients without demanding payment first. But that's as far as it goes. A hospital can delay or reschedule an elective procedure pending an acceptable payment plan.

As employers have shifted to high-deductible health plans to control their premiums, patients are responsible for larger amounts. And as the economy has foundered, some hospitals have seen more patients try to walk away from their bills.

His staff meets monthly to review the list of delinquent accounts, he said. Each month, the same number — $3,280 — comes up again and again, he said. "That's the Medicare or Horizon or Aetna deductibles and co-insurance."

Working out payments

Hospitals will work out payment plans, but usually press for full payment within a year. They'll also check to see whether the patient qualifies for Medicaid or charity care. "We'll work with them and try to figure out a way to get paid," Lemaire said.